More than a month after he originally was supposed to deliver his budget speech, Gov. Pat Quinn this week finally will outline his spending plan for the next budget year.

When he does, Quinn will have to cope with the fact that a large part of the temporary income tax hike is scheduled to expire midway through the budget year, taking with it more than $1 billion in revenue.

Worse, a budget analysis by Senate President John Cullerton, D-Chicago, showed the budget hole that must be filled in the fiscal year that starts July 1 is $2.9 billion. That’s a combination of lost revenue from expiration of the income tax hike (which he put at $1.6 billion) coupled with spending increases the state cannot avoid, such as Medicaid expenses, contractual pay raises and higher pension costs.

It all will be done against the backdrop of what promises to be a contentious political campaign year in which Quinn, a Democrat, is seeking re-election against Republican venture capitalist Bruce Rauner. Heading into the budget speech, there is agreement that it will be political.

“I do think this will help set a tone for the session and so the fall campaign,” said David Yepsen, director of the Paul Simon Public Policy Institute at Southern Illinois University. “I also expect he’ll start to talk to people in Illinois about just how big the budget challenges are in front of us.”

And, Yepsen said, it probably will be vintage Quinn.

“It’s going to be a populist speech,” he said. “It’s clearly a national Democratic theme. It’s there with Madigan’s millionaire tax. I imagine the word ‘populism’ is going to get used an awful lot in the analyses of the speech.”

House Speaker Michael Madigan, D-Chicago, has introduced a proposed constitutional amendment that would impose a 3 percent income tax surcharge on incomes above $1 million a year. It would raise about $1 billion a year to be used for K-12 education.

“I think people view this as a political speech and a political blueprint,” said Sen. Matt Murphy, R-Palatine, the Senate Republicans’ point person on the budget. “What impact it has on the actual budget is probably negligible.”

‘Conditioning’ opinion

Quinn so far has ducked questions about whether he favors continuation of the income tax increase. Some observers believe Quinn could continue to avoid answering the question directly while laying out a budget that shows dire consequences if the tax is allowed to expire.

“I don’t expect him to lay out a painful thing like continuing the tax. It’s very unpopular,” Yepsen said. “I think there’s going to be a period of time in which Democrats running Springfield are going to have to be conditioning public opinion about what the choices are. Until now, there hasn’t been a lot of discussion of it. Everyone is running from it.”

Page 2 of 2 - Senate Democrats estimated the size of the budget hole that needs to be filled next year will require state agencies to slash their budgets by 20 percent. Cullerton asked agencies to appear before Senate appropriations committees to detail what those kind of cuts would mean.

On Friday, a succession of agency officials spent more than three hours parading before the committees outlining staff cuts, facility closures, program eliminations and other consequences of such a cut. The Department of Juvenile Justice, for example, said two facilities would have to close and more than 200 staffers cut to meet such a reduction. It also would mean releasing 215 youth with no services or supervision, said director Candice Jones.

“I can barely provide minimum services for youth already in my care,” she told the committee.

The Department on Aging said it would have to slash its budget by $224 million, which would result in large cuts to its community care programs that help seniors stay in their homes rather than have to enter nursing homes. The alternatives, the agency said, would be to lop 43,000 clients from its rolls or completely end community services by March 15 of next year.

‘Everything’ political

The list went on, but Republicans on the committees said it was all political theater intended to buttress the idea of continuing the tax hike.

“Frankly, it is a pretty cynical ploy to put these people through a dog-and-pony show,” Murphy said.

In fact, Senate Republicans believe revenue and spending projections for next year developed in the House were skewed to make a political point.

“The numbers this spring so far have been politicized already, with revenue projections being pushed down and spending pressures being pushed up to create this impression you can’t have the tax increase go back down like they promised it would,” Murphy said. “I don’t think it’s an accurate picture they are painting.”

Sen. Daniel Biss, D-Evanston, agrees that the budget process already has been politicized, even before Quinn delivers his election-year budget address. He noted that House Republicans voted in favor of a resolution containing the revenue estimates, but Senate Republicans voted unanimously against it.

“The Senate roll call on the revenue estimate resolution was a big window into the dystopian circus we are about to enter,” Biss said. “Between now and when the polls close on Election Day, everything is going to be political.”